The Town of Erin will use reserve funds to cover an operating deficit of $62,924 for 2017, plus an unbudgeted total of $693,388 to complete the Wastewater Environmental Assessment.
Town council agreed on April 3 to fund the deficit from the Tax Rate Stabilization Reserve, which now has a balance of $224,881. At the end of 2016, that reserve was at $383,809.
Details on the 2017 fourth quarter results were presented in a report by Director of Finance Ursula D’Angelo. It includes explanations for departments that were over or under budget by more than 10 per cent or $10,000.
The overall operating budget is about $10.5 million. In addition, the Town had budgeted $7.6 million for capital projects in 2017, but by the end of the year had spent only $2.4 million. Council has agreed to push a list of projects forward to 2018.
D’Angelo also got council approval to cover $693,388 in outstanding costs for the Wastewater EA, to be funded equally between three reserve funds: Infrastructure, Water Lifecycle and Administration Development Charges.
The March 2016 EA contract with Ainley Group was $899,253, and the town intended at the time to budget $200,000 per year towards it for three years. That was done in 2016, and with funds brought forward from 2015, $345,865 was covered.
D’Angelo’s report indicates that no funds for the contract were allocated in the 2017 or 2018 budgets. Councillors made no comment about this, but Mayor Allan Alls said later that covering these costs from reserves was always the plan.
Also not included in the budget or the cost of the Wastewater EA was $140,000 in management fees from Triton Engineering. When added to the Ainley obligation, the total outstanding is $693,388.
“I want to know how we missed the management fees,” said Coun. John Brennan. “Obviously that is an important part of any project, and something that we need to pay attention to as we go forward.”
The town’s 51 reserve accounts were up by about $1 million at the end of 2017, to a total of $9.1 million, and are projected to be almost $10 million by the end of 2018.
The fourth quarter report shows the administration department 19 per cent over budget, partly because better tax collection reduced income from penalties and interest.
Administration expenses were also higher than expected by 14 per cent, with an extra $90,000 in labour costs due to staff changes, and an extra $28,000 for temporary administrative support. Insurance and deductibles were higher by $52,000 due to “ongoing corporate matters”.
The planning budget took a hit of $64,665 in legal fees for the successful defense of the Angelstone Farms zoning bylaw at an Ontario Municipal Board hearing.
Planning revenue of $18,100 was just 53 per cent of the budget projection, while labour costs were 21 per cent over budget at $37,214. On the positive side, consulting services cost only $5,600, instead of the expected $39,900.
For bylaw enforcement and crossing guards, there was an extra $5,000 for labour costs and an extra $7,982 (100 per cent over budget) for legal fees. Revenue was only $950 (43 per cent of budget).
There were many positive and negative variances in the recreation department, including an extra $103,000 in labour costs due to staff changes. Facility rental income was down by $15,000 at the Erin Community Centre due to lower activity, and revenue from baseball diamond and soccer field rentals was lower due to rain-outs.
Council has voted in favour of doubling its general liability insurance coverage from $25 million to $50 million, for a premium increase of $1,500 annually. The full insurance contract with Jardine Lloyd Thompson Canada Inc. has an annual premium of $127,862.
